Drop in homes for sale is strengthening prices in many spots

The nation has fewer homes for sale, and that's helping prices in markets where low supplies are meeting strong demand. The U.S. had 2.37 million existing homes for sale at the end of March. That was down 22% from a year ago and 41% from the peak in mid-2007, the National Association of Realtors reported Wednesday. First-quarter home sales, meanwhile, were up 5.3% from a year ago. The combination of improving sales — coming off one of the worst years ever for home sales — and declining inventories is helping prices. NAR says median existing single-family home prices rose in 74 of 146 U.S. markets in the first quarter, while they fell in 72 areas. In last year's fourth quarter, 29 markets showed gains from a year earlier. "Given the steadily dwindling supply of inventory and notably higher listing prices … prices are expected to show further improvements," says Lawrence Yun, NAR chief economist.

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